Your SlideShare is downloading. ×
PTC Windchill ROI Case Study - SRAM
PTC Windchill ROI Case Study - SRAM
PTC Windchill ROI Case Study - SRAM
PTC Windchill ROI Case Study - SRAM
PTC Windchill ROI Case Study - SRAM
PTC Windchill ROI Case Study - SRAM
PTC Windchill ROI Case Study - SRAM
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

PTC Windchill ROI Case Study - SRAM

373

Published on

SRAM deployed PTC Windchill to integrate and unify the engineering processes for all its brands. The company’s rapid growth through acquisition resulted in engineering and development groups that were …

SRAM deployed PTC Windchill to integrate and unify the engineering processes for all its brands. The company’s rapid growth through acquisition resulted in engineering and development groups that were not able to communicate and share information across departments. The company needed a solution that would support its holistic business process approach to the creation and management of product data, with PLM integrating processes, technology and people into an information backbone to facilitate a lean enterprise. Nucleus found that PTC Windchill enabled SRAM to create uniform product data management and workflow practices, resulting in increased engineering productivity, improved customer satisfaction, and more accurate decision making across the enterprise.

Published in: Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
373
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
16
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. NucleusResearch.com Phone: +1 617.720.2000 Nucleus Research Inc. 100 State Street Boston, MA 02109 THE BOTTOM LINE SRAM deployed PTC Windchill to integrate and unify the engineering processes for all its brands. The company’s rapid growth through acquisition resulted in engineering and development groups that were not able to communicate and share information across departments. The company needed a solution that would support its holistic business process approach to the creation and management of product data, with PLM integrating processes, technology and people into an information backbone to facilitate a lean enterprise. Nucleus found that PTC Windchill enabled SRAM to create uniform product data management and workflow practices, resulting in increased engineering productivity, improved customer satisfaction, and more accurate decision making across the enterprise. ROI: 128% Payback: 1 year Average annual benefit: $1,372,434 THE COMPANY Headquartered in Chicago, SRAM is a global manufacturer of bicycle components. The company is composed of several brands, including Rock Shox, Avid, Truvativ, Zipp, and Quarq. Started 25 years ago with the advent of the Grip Shift, SRAM continues to grow its business to supply a full line of bicycle components for casual and expert riders. THE CHALLENGE The company’s fast growth through acquisition brought five different engineering processes together into a single company, fragmenting the processes and communication among each unit. Prior to implementing PTC Windchill, each unit’s engineers were using their company’s pre-existing methods, making it difficult to share information across business units and unify communications between engineering, development, and manufacturing. ROI CASE STUDY PTC WINDCHILL SRAM Document O171 July 2014
  • 2. Page 2 © 2014 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. Nucleus Research is the leading provider of value-focused technology research and advice. NucleusResearch.com July 2014 Document O171 Like many manufacturing companies, SRAM is heavily dependent on CAD as part of its engineering processes. The company needed a solution with a strong CAD integration that could also create uniform workflows and product data management practices across the company to increase the productivity of its engineers, provide greater information transparency among departments, and streamline product development. “For SRAM the key factor about PTC is they are ‘Business Value’ focused instead of tool focused. This matched our holistic business process approach to PLM. That combined with their tools’ capabilities made PTC a clear choice.” - Michael Johnson, Global PLM Manager, SRAM THE STRATEGY The company examined several solutions looking at a variety of features, including the strength of the CAD integration available. Evaluating other solutions, SRAM found that they did not offer the appropriate balance of functionality. For example, SAP’s solution was too transactional and engineering-driven, while others were too focused on project management. The company ultimately chose to deploy PTC Windchill because it was a product development oriented solution that offered the most robust integration with CAD, a strong workflow engine, and broad baseline functionality that it was able to extend to directly support its processes without customizing the core PTC Windchill toolset. The company started the deployment in 2007, taking approximately eight months from start to finish. The company did acknowledge that the deployment planning period was longer than it anticipated because it planned to roll the solution out to its 16 locations and 450 users overnight, rather than on a site-by-site basis. PTC Global Services were engaged to aid the deployment. The company also purchased four new servers to consolidate information storage for each engineering department in a single location. Users attended four, half day training sessions prior to the deployment date. SRAM’s engineering operations are now unified with product life cycle management that provides a strong workflow and product data management capabilities that are highly integrated with CAD, supporting its continuous improvement approach throughout the organization. The company was able to implement multiple enterprise processes simultaneously at the time of deployment, including enterprise change management, Cost : Benefit Ratio 1 : 2.5 Types of Benefits Direct 48% 52% Indirect
  • 3. Page 3 © 2014 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. Nucleus Research is the leading provider of value-focused technology research and advice. NucleusResearch.com July 2014 Document O171 document management, uniform drawing standards, and a single part number system for all brands. KEY BENEFIT AREAS The unified and streamlined engineering process enabled SRAM to increase the number of projects handled by engineering while at the same time empowering other business units with the collaboration tools to utilize the most accurate, up-to-date information. Key benefits of the project include:  Increased engineer productivity. The product data management and CAD integration functionality of PTC Windchill has enabled the company’s engineers to manage ongoing projects more efficiently. By eliminating redundant information and misplaced documents, engineers now save approximately one to two hours each week. The increased efficiency and time savings has made it possible to have four times the number of active projects being developed simultaneously compared with pre-deployment levels. The central data repository has also reduced data entry times and the risk for human error while entering information.  Avoided costs. The increased productivity has allowed for more projects to be in development simultaneously without increasing the number of engineers. The company would have had to hire 15 engineers to be able to manage the same number of development projects that it is currently maintaining.  Increased customer satisfaction. The robust workflow engine in PTC Windchill has enabled development and engineering teams to more precisely roadmap development and manufacturing, enabling the company to give customers confirmed ship dates with greater lead times for new components. The company has also tightly integrated the solution with its sales department, enabling sales teams with the collaboration tools to examine and execute custom component deals with the confidence that they can be delivered on time and at a profit for the company and the customer.  Improved decision making. As part of its continuous improvement model, SRAM has integrated PTC Windchill across multiple business applications, including ERP, sales, and analytics, to provide current and accurate development, manufacturing, and procurement information to all business units to drive faster, more precise decision making across the organization.
  • 4. Page 4 © 2014 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. Nucleus Research is the leading provider of value-focused technology research and advice. NucleusResearch.com July 2014 Document O171 KEY COST AREAS Costs of the project included software license and maintenance fees, hardware, personnel time to implement and support the application, user training time, and consulting costs. PTC Global Services were engaged prior to the deployment and for the first year after deployment to assist with further configuration. BEST PRACTICES The scope and breadth of manufacturing requires tight integration and efficient communication among multiple departments to ensure that projects make it from engineering to the customer on time and within narrow cost ranges. To maintain these elements, a product lifecycle management solution must provide a balance of functionality that is not exclusive to engineering, but is relevant to and adoptable among multiple business groups. The broad set of base functionality combined with the ability to configure and integrate the solution across the organization enabled SRAM to derive value from the solution in multiple business units. The workflow engine, robust integration tools, and product data management capabilities have allowed the company to adopt, as an organization, an ideology of continuous improvement across business units, from sales to manufacturing. Net Cash Flows (1,494,615) 1,662,947 2,037,947 2,037,947 Initial Year 1 Year 2 Year 3
  • 5. Page 5 © 2014 Nucleus Research, Inc. Reproduction in whole or in part without written permission is prohibited. Nucleus Research is the leading provider of value-focused technology research and advice. NucleusResearch.com July 2014 Document O171 CALCULATING THE ROI Nucleus quantified the initial and ongoing costs of software subscription fees, hardware, personnel time to implement and support the application, employee training time, and consulting over a 3-year period to calculate SRAM’s total investment in PTC Windchill. Direct benefits quantified included the avoided hiring of addition engineers, and the elimination of a license for legacy software. The indirect benefit quantified included the increase in engineer productivity driven by the deployment, calculated based on the average annual fully loaded cost of the employees. These productivity savings were quantified based on the average annual fully loaded cost of an employee using a correction factor to account for the inefficient transfer between time saved and additional time worked. Cumulative Net Benefit 168,332 2,206,279 4,244,226 Year 1 Year 2 Year 3
  • 6. FINANCIAL ANALYSIS PTC Windchill Annual ROI: 128% Payback period: 0.9 years ANNUAL BENEFITS Pre-start Year 1 Year 2 Year 3 Direct 0 1,137,000 1,137,000 1,137,000 Indirect 0 1,216,947 1,216,947 1,216,947 Total per period 0 2,353,947 2,353,947 2,353,947 CAPITALIZED ASSETS Pre-start Year 1 Year 2 Year 3 Software 0 0 0 0 Hardware 0 0 0 0 Project consulting and personnel 0 0 0 0 Total per period 0 0 0 0 DEPRECIATION SCHEDULE Pre-start Year 1 Year 2 Year 3 Software 0 0 0 0 Hardware 0 0 0 0 Project consulting and personnel 0 0 0 0 Total per period 0 0 0 0 EXPENSED COSTS Pre-start Year 1 Year 2 Year 3 Software 285,000 36,000 36,000 36,000 Hardware 150,000 0 0 0 Consulting 375,000 375,000 0 0 Personnel 175,000 280,000 280,000 280,000 Training 509,615 0 0 0 Other 0 0 0 0 Total per period 1,494,615 691,000 316,000 316,000 FINANCIAL ANALYSIS Results Year 1 Year 2 Year 3 Net cash flow before taxes (1,494,615) 1,662,947 2,037,947 2,037,947 Net cash flow after taxes (822,038) 914,621 1,120,871 1,120,871 Annual ROI - direct and indirect benefits 111% 124% 128% Annual ROI - direct benefits only 30% 42% 47% Net Present Value (NPV) (822,038) 32,747 1,011,760 1,926,724 Payback period 0.9 years Average Annual Cost of Ownership 1,494,615 2,185,615 1,250,808 939,205 3-Year IRR 108% 108% FINANCIAL ASSUMPTIONS All government taxes 45% Cost of capital 7.0% Page 6 © 2014 Nucleus Research, Inc. Reproduction in whole or part without written permission is prohibited. All calculations are based on Nucleus Research's independent analysis of the expected costs and benefits associated with the solution. NucleusResearch.com
  • 7. By the Numbers SRAM's PTC Windchill project THE PROJECT THE RESULTS Increased engineer productivity Avoided additional hires Increased customer satisfaction Cost : Benefit Ratio - Michael Johnson, Global PLM Manager, SRAM NucleusResearch.com Copyright 2014 Nucleus Research Inc. Nucleus Research Report o171 - PTC Windchill ROI case study - SRAM “PTC is very product development oriented, particularly in product life cycle management and 3D CAD modeling, so for us PTC became the clear choice.” 8 Annual Return on Investment months SRAM deployed PTC Windchill to integrate and unify the engineering processes for all its brands. Nucleus found that PTC Windchill enabled SRAM to create uniform product data management and workflow practices, resulting in increased engineering productivity, improved customer satisfaction, and more accurate decision making. Months Total time for the company to deploy PTC Windchill Number of users: 12 $1,372,434 Average annual benefit 128% 1 : 2.5 The total time to value, or payback period, for the project 450

×